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Bloomberg: PetroChina Output Climbs 3.7%, Outpacing Exxon, Shell (Update2)

By Ying Lou
July 16 (Bloomberg) — PetroChina Co., the nation’s biggest oil company, increased first-half production 3.7 percent, surpassing growth at Exxon Mobil Corp. and Royal Dutch Shell Plc as China intensifies efforts to meet energy demand.

Oil and natural gas output rose to the equivalent of 3.05 million barrels of oil a day, the Beijing-based company said today. Oil production gained 0.1 percent from a year earlier, while gas jumped 16.5 percent.

PetroChina will outspend Exxon Mobil, Shell and BP Plc this year to expand supplies to the world’s fastest-growing major economy. A government-backed drive to acquire and open fields has enabled Chinese companies to increase output as production at their global rivals falters.

“Globally, most producers are just trying to maintain their current output levels,” said Grace Liu, an oil analyst with Guotai Junan Securities (Hong Kong) Ltd. “PetroChina achieved the target it set for oil output. The natural gas number is a bit lower than management guidance, but with fields coming on stream in the second half, there will be more increases.”

PetroChina’s oil production reached 2.32 million barrels a day in the first six months of this year as daily gas output climbed to 4.41 billion cubic feet, PetroChina said in a statement posted on its Web site. The average price PetroChina earned for its crude oil dropped 1.9 percent to $57.66 a barrel. Gas sold for 4.53 percent more, at $2.54 per thousand cubic feet.

Production Target

PetroChina aims to produce the equivalent of 3 million barrels of oil a day this year, it said in March. Oil production may rise to 2.3 million barrels a day, with daily gas output reaching 4.56 billion cubic feet, the company said.

Fields overseas contributed 138,000 barrels a day of oil and 131 million cubic feet of gas a day in the first six months.

Exxon Mobil’s oil and gas production fell 2.7 percent to the equivalent of 4.44 million barrels of crude a day in the first quarter, the world’s biggest company by market value said April 26. Shell’s first-quarter output dropped 6.3 percent, Europe’s biggest oil company said May 3.

Chevron Corp., the second-largest U.S. oil company, said July 10 second-quarter oil and natural-gas output was little changed from a year ago. It pumped the equivalent of 2.66 million barrels of oil a day in April and May, down from 2.67 million a day during the second quarter of 2006.

Spending Jump

PetroChina unveiled plans in May to spend 40 billion yuan ($5.2 billion) by 2012 developing the nation’s biggest oil discovery in almost half a century. The Jidong Nanpu field in northern China’s Bohai Bay area has reserves equivalent to 7.5 billion barrels of oil, and may yield about 200,000 barrels a day by 2012, the company said.

Capital spending may jump to $24.5 billion this year from $19.7 billion in 2006, PetroChina said in March. Exxon Mobil, the world’s biggest oil company, set a 2007 capital budget of $21 billion in March.

Shell said in February it will spend as much as $23 billion to stem an expected fifth year of declining production. BP’s capital spending will rise to about $18 billion, it said Feb. 6.

PetroChina has become the world’s fourth-largest company by market value, after its stock rose 46 percent in the past year. The shares traded 0.3 percent lower at HK$12.30 at 11:31 a.m., 14 cents short of their record close.

The company, whose net income rose 6.6 percent to a record 142.2 billion yuan last year, plans to sell as many as 4 billion shares for a listing in Shanghai, raising more than $6 billion for overseas acquisitions, oil drilling and refinery construction.


Investors will vote Aug. 10 on the proposed stock sale, to be arranged by UBS AG, China International Capital Corp. and Citic Securities Co.

In the second quarter, PetroChina produced 2.31 million barrels a day of oil and 4.26 billion cubic feet of natural gas a day, it said in the statement. The pace of first-half output growth slowed from a year earlier when oil and gas production climbed 6.8 percent.

China’s second-largest refiner processed 3.8 percent more oil in the first-half, its plants handling 2.25 million barrels a day. The company turned 2.26 million barrels of oil a day into fuels and chemicals in the second quarter. PetroChina increased the number of filling stations it operates 3.8 percent from a year earlier to 18,630.

The nation’s economy, powered by record exports and an investment boom, probably expanded 10.9 percent in the second quarter after surging 11.1 percent in the first, a Bloomberg survey of economists showed. The government will release the figures in Beijing on July 19.

China’s economic development “will persistently intensify the demand for oil and gas as well as the demand for petrochemicals” which “will be in favor of PetroChina’s operations,” the company said in today’s statement.

To contact the reporter on this story: Ying Lou in Hong Kong at [email protected].net

Last Updated: July 15, 2007 23:42 EDT and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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